As of 1 December 2021, the new Community Land Management Act 2021 and the Community Land Development Act 2021, along with their corresponding regulations come into effect with some significant new changes expected.
Replacing their 1989 versions, the expected changes are an important step and will align the community schemes legislation with the Strata Schemes Management Act 2015 and the Strata Schemes Development Act 2015. This alignment will provide greater consistency as well as account for important differences between strata and community titles.
The new laws can be viewed on the NSW Legislation website using the below links:
What are the major changes to the Community Land Management Act 2021?
Some of the major changes include the following:
Extension for the convening of the First AGM
The period within which an original owner must hold the first general meeting of an association under the Act, section 12(1) has been extended from two months to six months for schemes that come out of their initial period between 1 December 2021 to 1 April 2022. They must now hold their first AGM by 1 June 2022 instead of 1 February 2022. This new “transitional” regulation provides extra time for those associations that would be affected by the impracticalities of arranging numerous meetings over the Christmas and New Year holiday period.
By-law restrictions
There are various changes to by-laws that may affect your strata scheme. These include introducing a new provision that aligns with the Strata Schemes Management Act 2015 (NSW), where a by-law cannot be “harsh, unconscionable or oppressive”.
Additional time to register a by-law amendment
Previously, under the Community Land Management Act 1989, you had two months to register an amendment to a by-law. This has now increased to six months and must be lodged with the Registrar-General.
Amendment of the management statement
Rather than using a unanimous resolution, amending the management statement can be achieved through a special resolution, providing greater flexibility.
Sustainability infrastructure resolutions
This new legislation also allows sustainability infrastructure resolutions to be passed as a special resolution with a simple majority vote. Only an ordinary resolution is required, rather than previously requiring a special resolution.
Appointing a strata managing agent
If a strata managing agent is appointed at the first annual general meeting, their term of employment will be 12 months. Outside of this, it will be three years, including reappointment.
Committee representatives
A managing agent, facilities manager for an association or real estate agents who have leased lots in the strata scheme cannot be appointed, nominated or elected as a committee member. For schemes that have more than 50% of lots tenanted, a tenant representative may be nominated to attend the committee meetings, on behalf of the tenants, but they have no voting rights.
Developers unable to vote on building defects matters
A developer of an association scheme is restricted from voting or exercising a proxy vote on any matters addressing building defects or rectification of building work.
Financial interest restrictions
Any non-owner with a financial interest in the scheme, such as a managing agent or letting agent, is prohibited from being a committee member. It will also be mandatory for a person who has an interest in a community development lot, precinct development lot or neighbourhood lot that confers a right to vote at an association meeting to provide the association with notice of the interest.
Alternative meeting and voting procedures
To align with technology advances and provide greater flexibility to owners, new ways of attending meetings will be allowed including via video, teleconferencing, social media, postal or electronic voting and secret ballots. AGMs and quorums will also benefit from greater flexibility, whilst a chairperson can declare a quorum at a meeting after 30 minutes. Limitations will also be introduced regarding the number of proxies any person can hold and what a proxy vote can be used for.
Tenants required to provide a postal or email address
A new provision requires tenants to provide the association with a physical or email address to allow notices, agendas and other important documents to be sent to them.
Levy estimates
If a levy estimate provided by a developer proves to be inadequate, then they are required to pay compensation. However, if the developer can prove they did their due diligence when preparing the levy estimates, they may be released from this payment.
Unpaid levies
Associations can follow up unpaid levies and interest through NSW Civil and Administrative Tribunal (NCAT).
Initial maintenance schedule and other documentation
An initial maintenance schedule of the scheme must be drawn up by the original owner and provided to the association before the initial period ends. Documents required include planning approvals, fire safety certificates and compliance certificates.
Expiration of utilities
If an agreement for the scheme’s utility supply was drawn up before the first annual general meeting, this agreement will expire at the first AGM. Otherwise, this will expire three years after the commencement date. This does not apply to residents’ electrical embedded network agreements. Utility agreements will also need to be added as an agenda item at AGMs to be discussed.
Get in touch
To learn more about these upcoming changes and how this might affect your scheme, contact the team at The Strata Collective today.